Back when the U.S. Department of Justice settled claims against Omnicare, the nursing home services company, word was that Johnson & Johnson would be the next pharma company in line for government action. That's proven to be the case, as the government has sued J&J, alleging that it paid kickbacks to persuade Omnicare to buy more J&J meds and recommend them to nursing-home clients.
The alleged arrangement was this: J&J would pay Omnicare rebates amounting to millions of dollars, provided that J&J claimed a greater share of the scrips handed out to the company's nursing home patients. Justice alleges that the rebates amounted to kickbacks and helped pump up Omnicare's purchase of J&J drugs to more than $280 million from $100 million. Among the drugs whose sales increased most were the antipsychotic Risperdal and the antibiotic Levaquin.
According to the suit filed in Boston, even J&J executives questioned the financial ties between the company and Omnicare. The ethics--and legality--of the arrangement came up four times between 1999 and 2004, BNet Pharma reports, quoting the lawsuit. Details of the two companies' agreements were tweaked here and there, at least once because J&J's in-house legal team was reviewing the Omnicare relationship, the lawsuit states.
J&J says it believes it's well within the law, adding that it's looking forward to telling its side of the story. "We believe airing the facts will confirm that our conduct, including rebating programs like those the government now challenges, was lawful and appropriate," a spokeswoman writes in an email.
- find the U.S. Attorney's release
- see the Star-Ledger news
- read the story in the Wall Street Journal
- get more from BNet Pharma
- check out the Barron's item
- find the article in the Washington Post
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